Famous Fortune Fights!
by Andy & Danielle Mayoras

Lawsuits

While the final Tom Clancy estate battle may not have been as exciting as the climactic scenes in The Hunt for Red October or Patriot Games, the struggle between author Tom Clancy’s widow and four adult children over his $86 million estate is now over. The seven justices on the Maryland Court of Appeals (the highest court in Maryland) were asked to rule about what a key clause in the codicil to Clancy’s will actually meant. While it was close — four votes to three — the ruling marked a decisive victory for Clancy’s widow.

Considering that Tom Clancy is one of the best-selling authors of all time, it is ironic that the fight boiled down to how to interpret a clause in his estate planning documents that was written in an unclear manner.

The dispute centered around a provision in Clancy’s second codicil (which means amendment) to his will. The will, originally signed in 2007, divided Clancy’s assets into three trusts: one-third for his wife, another third for his wife to use while she was alive and then onto his daughter from that marriage, and the last one-third to be split between his four adult children from a prior marriage. You can read more details about his estate and how the dispute started in our prior article, Tom Clancy Estate In Family Fight Due To Poor Estate Planning.

Just weeks before he died at 66 from heart failure, Clancy signed the codicil, which included this key sentence: “No asset or proceeds of any assets shall be included in the Marital Share of the Non-Exempt Family Residuary Trust as to which a marital deduction would not be allowed if included.”

Does this language seem a bit unclear to you? If so, you’re not alone. The seven justices of Maryland’s highest court were closely divided about what this language meant. The four who ruled in favor of Clancy’s widow believed that this clause meant that all estate taxes from Tom Clancy’s Estate would have to be paid by the children’s trust, not the trusts containing her money, because that was the only way to fully protect the martial deduction to federal estate tax laws.

The other three justices sided with the children. They agreed that this clause was meant to protect the marital estate tax deduction yet felt it was not meant to alter another provision in Clancy’s will that stated that the tax bill was to be paid equally from two of the trusts, not from the children’s trust alone. In other words, they felt that the children should only pay one-half the tax bill, not all of it, and this clause did not alter the outcome. These justices felt that Tom Clancy wanted to protect the marital deduction but not to increase it at the expense of what his children would inherit.

Interestingly, the lawyer who drafted this codicil initially acted as executor of Tom Clancy’s estate, and he sided with the children. This certainly suggests that the language was intended to apply as the children contended, but the law turns not on what was intended, but on what the documents actually say.

What does all this mean for Tom Clancy’s heirs? The four children now have to pay an estate tax bill to the IRS of almost $12 million. If they had won, the total tax bill would have been closer to $16 million, but they would have split it with one of the trusts set up for Clancy’s widow. So they lost $8 million, and the IRS lost out on about $4 million.

That’s a lot of money in play over one awkward sentence. Ahh rich people, problems, right? Not so fast.

Clancy built his fortune on weaving words into compelling stories. But with one unclear clause in his estate planning documents — a clause that the drafting lawyer felt said something different than what the Court of Appeals ruled — Clancy’s heirs were forced to battle in court for two years, with millions of dollars on the line. And it all would have been avoided if the language was clear.

Here’s the lesson for all of us (millionaires and non-millionaires alike): What you intend your will or trust documents to say does not matter if they are written differently than what you meant. The wording of the documents, not what you tell your estate planning attorney, is the only thing that matters.

Battles like this do happen on a regular basis across our country. While millions of dollars of estate taxes aren’t usually on the line, it’s very common for poorly-drafted wills and trusts to lead to long, expensive battles among heirs who read the same language in different ways.

So how do you insure that your wishes are followed and prevent a fight like this happening to your heirs? First, work with an experienced estate planning attorney. Attorneys who specialize in estate planning are far less likely to prepare a confusing or contradictory document that those who don’t. This doesn’t mean that mistakes cannot happen, even by the best attorneys, but the chances are greatly reduced. Not all lawyers are the same, just like not all doctors are. It’s far better to work with an estate planning specialist who comes with a strong recommendation.

Second, read your documents carefully before you sign them. Ask questions of your attorney; make sure you understand what everything means. If you have any doubts, you can always have a trusted professional or another attorney give you a second opinion. Taking the time to be careful and thorough is always a good idea, when it comes to estate planning.

If a fortune fight can happen to the estate of a man who made tens of millions of dollars through his words, it can happen to you too! Take your estate planning seriously and hire the best attorney you can … and even then read the documents carefully to make sure they say what you really intend.

Muhammad Ali was never one to shy away from battles. From heavyweight champions in the boxing ring, to the United States Government, and to the ravaging effects of Parkinson's disease, Ali continued to fight. Now there are growing fears that the fight will follow him into the grave, with mounting reports of trouble on the horizon for his estate and his legacy.

The circumstances are ripe for an estate battle. Muhammad Ali fathered nine recognized children (including his adopted son from his most recent marriage) over the course of four different marriages. Estate disputes between the surviving spouse and children from prior marriages are the most common source of trouble in probate courts across our country. Add in the reality of Ali's long-standing struggles with Parkinson's disease -- which can have not only physical effects, but mental as well -- and there is a strong possibility that unhappy heirs may file challenges in court.

And, of course, there is the reality that so much money is on the line. Initial reports are that Muhammad Ali's fortune ranged between $50 million and $80 million. But that could just be the start. As Entertainment Tonight reported, the value of the champ's fortune could increase dramatically now that he is gone, just as happened with Elvis Presley, Whitney Houston, and Michael Jackson.

Prince died without a will. So did Tupac Shakur, Bob Marley, and many other legendary musicians. Snoop Dogg doesn't even want a will.

The question is: Why?

It seems like such a basic concept; everyone needs a will. Otherwise the laws of the state you live in determine who receives your assets and controls your legacy after you die. Without a will, you have no say in what happens, and the chances of a family fight increase dramatically.

Even though a will is relatively simple to create, studies consistently show that between 60% and two-thirds of adult Americans don't have a will. All states recognize a "holographic" will, which is one in your own hand-writing. They are perfectly valid as long as a couple basic conditions are met. This is not to say they are perfect by any means, but usually better than nothing. And most lawyers can create a basic will for a few hundred dollars or even less.

Even when an estate is modest is size, dying intestate -- without a will -- is never a good idea. So why don't more adults have wills -- including a surprising number of the extremely-wealthy?

These musical superstars highlight important lessons about why so many people fail to create a will before they die:

1. Prince: Didn't Trust Professionals

The artist originally known, then formerly known, and then known again as Prince, reportedly developed a deep distrust of professionals, including lawyers. He felt he had been burned earlier in his career by signing legal documents, so a stream of professionals was unable to convince Prince Rogers Nelson to sign important legal documents like a will.

The first battle over the Prince Estate will be to determine who Prince's heirs actually are. This morning, a man named Carlin Q. Willliams filed the first official paternity claim, based on his mother's affidavit saying she met Prince in July of 1976. One thing led to another, and nine months later, Carlin was born. A DNA test will come next, based on blood samples already preserved from Prince's body.

This paternity claim is just the beginning of the long road for the Prince Estate, trying to determine who should receive Prince's money. If Prince had done a simple will, his instructions would have dictated who received what. Paternity tests would not have been necessary.

Sadly, Prince's distrust of professionals means that a large chunk of his fortune will be spent paying legions of professionals while his heirs (both actual and potential) try to sort out the mess he left behind.

Tupac Shakur was well-known for his "Thug" image, his rap prowess, and his many Tupac Shakur's estateconflicts -- leading up to the tragic shooting that took his life at age 25. So should anyone be surprised at the high number of legal battles involving Tupac Shakur's estate? Or that Shakur could continue to be a pioneer in rap music, even years after his death?

This is installment #17 of our Estate Planning Lessons From The Stars series, which is based on the Celebrity Legacies TV show for which we provide commentary as the estate legal experts. See other articles in the series here.

Tupac Shakur came to fame in large part due to his battles with police, inspiring lyrics in his first solo release so violent that Dan Quayle publicly denounced them -- building Shakur's "Thug" image in the process. In the same time frame, he was arrested five times for violent crimes, leading to numerous criminal charges and civil lawsuits, culminating in a confrontation during which he was shot multiple times. The very next day, Tupac was sentenced to prison for molestation.

What better way to start the new year than by counting down Trial & Heirs Top Ten Celebrity Legal Battles of 2015, complete with lessons?

1. Bill Cosby vs. many woman - Andrea Constad is one of dozens of women who have sued Cosby for defamation, accusing the comedian and actor of lying when he denied sexually abusing them years ago. In Constad's civil lawsuit, Cosby's deposition was unsealed, revealing that he admitted giving women quaaludes and having intercourse with them. He says both the drug use and sex were consensual. Recently, a Pennsylvania district attorney brought charges against Cosby for sexual assault based on the 2004 encounter with Constad.

Lesson: When victims of assault or other injuries wait too long, they lose the right to sue under the statute of limitations. The specific length of time varies based on what state the events happened in and what type of claim is brought. That's why most of the accusers are suing Cosby for defamation, rather than sexual assault. Even criminal cases have a time limitation on when cases can be brought. This new criminal case against Cosby was brought not long before the 12-year statute of limitations expired. Anyone who feels they have a claim to sue, for assault or any other reason, should act promptly and not wait until it is too late.

The news broke recently that the divorce proceeding between Big Bang Theory actress Kaley Cuoco and professional tennis player Ryan Sweeting just became a great deal more complicated than originally reported.

Perhaps that shouldn’t be surprising. After all, Cuoco recently was named as Forbes’ highest paid TV actress for 2015 (in a tie with Sofia Vergara), with $28.5 million in earnings, including an impressive payday of one million dollars per episode. Comparatively, Sweeting — who boasts only one career tournament win and has been battling injuries — has an estimated net worth of only two million dollars, about $42 million less than Cuoco’s reported net worth.

So why should anyone be surprised that the spouse worth less is asking for financial support from the big bread winner?

Kaley Cuoco played a smart game from the start. Even though she and Ryan Sweeting were married after only six months of dating, Cuoco and Sweeting had a prenuptial agreement, signed on November 20, 2013 — more than a month before their wedding on December 31, 2013. With a good prenup in place, a drawn-out match over financial issues like spousal support can be largely avoided.

Note the important qualifier here — “largely” avoided is not “completely” avoided. The existence of a prenuptial agreement does not end the match. It certainly gives Cuoco a big lead in the battle over spousal support though.

James Dean was the iconic rebel without a cause. The James Dean Estate, on the other hand, has been driven by a cause -- maximizing the value of his image and likeness. But was it taken too far when his heirs sued Twitter?

This is installment #16 of our Estate Planning Lessons From The Stars series, which is based on the Celebrity Legacies TV show for which we provide commentary as the estate legal experts. See other articles in the series here.

Perhaps no Hollywood legend has lasted so long, and left such an impact, as James Dean. After dying in a tragic car crash at age 24, in 1955, Dean continued to appear among the top of highest earning deceased celebrities year after year, including being in the top ten as recently as 2012, when his estate earned about five million dollars. Not bad for actor who only starred in three major films.

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Legal Disclaimer

Legal Disclaimer

Nothing in this blog should be relied on as legal advice. The information contained herein does not create an attorney/client relationship. The articles posted are intended for entertainment and general information purposes only. Laws vary state by state. Anyone seeking legal advice for a specific situation should consult a qualified probate lawyer or similar qualified professional in the appropriate state.